For landlords keen to keep at arm’s length the daily work involved in running an investment property, appointing a property manager is the obvious way to go. But for those new to the property market it can be hard to know exactly what to expect from a good property manager and how to make your expectations legally binding.

Unless you have a recommendation from a trusted source for a property manager, you’ll need to interview a handful of candidates from real estate agencies in your area.

Ask around about agencies active in your area or do some research via newspapers and the internet. The Real Estate Institute of Victoria runs training in property management for its members and can provide details of members with property management skills.

It’s wise to ask each candidate you interview not just what their fees and charges are but what kind of experience they have.
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This means not only how many years they have been at it (many property managers are young but have broad experience) but how many properties they are responsible for at present, how they communicate with landlords, and how many times they have ended up in dispute at the Victorian Civil and Administrative Tribunal.

You should also find out about their costs, whether these are negotiable, what services are included, and how soon after payment rent money is released to landlords.

Typical responsibilities include advertising and marketing properties, vetting and placing tenants, collecting rent, releasing it to landlords, liaising with tenants regarding maintenance and repairs, and alerting landlords to problems such as late rent payment.

As the landlord, you need to be sure any duties you want the property manager to perform are laid out clearly in the contract or authority you eventually sign.

The Consumer Affairs Victoria website offers some useful tips for landlords regarding typical fees and charges. These include ensuring contracts are GST-inclusive, finding out whether your agent charges a re-leasing fee if a current tenant signs a new tenancy agreement, and showing management fees in both percentage and dollar figures.

However, before putting pen to paper, it is important to clarify any fees outlined in the contract that you don’t understand. What, for example, is covered by an administration fee, statement fees or postage costs? Are there additional costs for VCAT appearances?

As landlord, you should decide upfront how involved you want to be in day-to-day issues. Those who prefer taking a back seat and letting the property manager organise things such as deducting rates, utilities bills, insurance or owners corporation fees from rent money need to outline this in the contract.

Ditto urgent repairs up to a certain dollar value. Those who would rather handle repairs themselves must inform their tenants and provide them with contact details.

As well as the contract, it is vital to shop around for suitable landlord insurance and discuss with prospective property manager procedures for things such as property inspections, condition reports, re-letting, and selling the property.

Should you decide down the track that you are unhappy with your property manager’s performance or can find better value elsewhere, it is also important to discuss exactly how either party goes about terminating their contract.

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